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HomeNewsCrypto Crash Course: Ethereum, Litecoin, Polkadot, and Pepe Navigating Turbulent Waters

Crypto Crash Course: Ethereum, Litecoin, Polkadot, and Pepe Navigating Turbulent Waters

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  • FTX, a now-bankrupt crypto exchange, is set to offload roughly $3.4 billion in crypto to revert to fiat currency payouts, potentially unsettling the altcoin market through 2023.
  • Venture Capital funds holding significant crypto assets, like Solana (SOL) and ApeCoin (APE), also face pressures to liquidate their positions, further exacerbating the predicted market downturn.

A Domino Effect on the Altcoin Landscape

Matrixport, in its latest report, sheds light on a potential market shift for the cryptocurrency sector, specifically in the altcoin arena. The need for liquidity, primarily by FTX, to the tune of an estimated $3.4 billion, comes as the exchange seeks to transition its token payouts to traditional fiat. This extensive divestiture, at an ambitious rate of $200 million worth of digital assets weekly, is foreseen to cascade until the close of this year.

But the ripple effects don’t stop with FTX. Matrixport’s investigation underscores that a sizable portion of the crypto market, notably represented by Venture Capital (VC) firms, is under the weight of delivering returns to their backers. Markus Thielen, the lead researcher at Matrixport, elucidates,

“Crypto Venture Capital funds are grappling with pressures to realize their investments and provide liquidity. Consequently, these funds emerge as significant prospective sellers in the altcoin realm.”

Solana and ApeCoin: Bellwethers of the Altcoin Dilemma

Solana’s recent market behavior offers a clear testament to the brewing tempest. Its value has seen a downtrend, possibly in response to FTX’s projected sales.

Further complicating the landscape is ApeCoin, another digital currency in the VC repertoire. An upcoming “unlock” event on September 17 will release 11% of its total outstanding tokens. For context, a similar event that unlocked 4.2% of ApeCoin on August 17 led to a precipitous 24% price fall. Given the magnitude of the imminent unlock, analysts anticipate a continued price slump.

Similarly, Axie Infinity’s token (AXS) is on the horizon for a substantial unlock on October 20, where 11% of its tokens will become available. A preceding event on July 22 that released a lesser percentage witnessed AXS’s value drop by 32%, adding to the mounting apprehension.

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Godfrey Benjamin
Godfrey Benjamin
Godfrey Benjamin is an experienced crypto journalist whose primary goal is to educate everyone about the prospects of Web 3.0. His love for crypto was sparked during his time as a former banker when he recognized the clear advantages of decentralized money over traditional payments. Business Email: info@ethnews.com Phone: +49 160 92211628
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